Budget Watch: (3) Capital Expenditure – affordable housing programme

The current affordable housing capital investment programme is due to run to 2026. That might suggest that no additional capital programme is expected in the Autumn Budget.

However, there are numerous calls for additional investment in social housing to offset the expected continuing slower housebuilding output. A significant capital expenditure programme for affordable housing would undoubtedly be a boost to the medium term plans for housebuilding. Certainly the Spending Envelope (2026 onwards) can be expected to include a reference to continued and, it is widely expected, increased capital spending for affordable housing in the next few years.

However, HM Treasury may want the next six months before the Spring Budget to be able to dig down into the best way in which to allocate and target affordable housing expenditure, given the widely noted challenges by Homes England in delivering its 2021-2026 targets.

It might be that a new government delivery programme is needed in order to provide modern and sustainable investment in social and affordable housing that delivers for taxpayers, effectively harnesses private finance and institutional investment and has all the players on the pitch, including for councils, for-profit registered providers and other housing managers.

Currently, a number of housebuilders are being held up in the delivery of sites where housing associations won't or are unable to contract to take planned social and affordable housing. As a result, some housebuilders are setting up their own registered housing providers to get sites moving. This isn't a new issue and greater structural reform is needed.

Looking at alternative models for delivering homes and harnessing finance is work currently being undertaken at the Housing & Finance Institute. It will be interesting to see whether in this Budget the new government opts for 'more of the same' or opens the door to more significant reforms.